MOSt Market Outlook

24th April 2017

Nifty Chart

Nifty Outlook

Nifty Cash R1

R2

S1

S2

9119

9191

9218

9090

9020

'Nifty index opened positive but failed to hold its gain

and corrected sharply towards 9088 mark. However it

recovered from lower levels but closed with the loss of

around 15 points. Index has got stuck in a broader trading

range and sustained selling pressure is being witnessed

at higher zone. Now if it sustains below 9090 then it may

drift down towards 9020 while a move above 9135 may

attract buying interest towards its next multiple hurdle of

9191 and 9218.

Currency (USDINR) Outlook

USDINR

64.64

S1

64.55

S2

64.30

R1

64.85

R2

65.00

Market Drivers

3

The pair is likely to trade in a range between intraday

resistance at 64.85 and support at 64.55 level with a

sideways bias.

Global cues will continue to be relevant in the

near term. French elections are being closely

monitored. Reports indicate a lead for

Emannual Macron who is seen as more for con-

tinuity while the opponent is seen as disrup-

tive. Win for Macron could bring a relief rally.

On the other hand North Korea continued to

make aggressive statements which will also

keep market participants watchful. On the do-

mestic front, focus remains on results. HDFC

Bank posted strong set of numbers. Loan growth

was strong driven by loans to corporates. Op-

erating profits saw a best of almost 10 percent

which is substantial. Mid-caps in sectors like

infra, real estate, auto ancillary continued to

see interest. Overall focus will remain on re-

sults and global cues.

Trading Idea - Cash & Future

Scrip

BHARAT FORGE

Sectoral Outlook

SL

Target

1040 1150

Highest Call OI

Outlook

POSITIVE

POSITIVE

Instrument

Nifty 27-Apr

Bank Nifty 27-Apr

Strike

9200

22000

OI

6125025

866800

Chg in OI

963975

101920

Reco

BUY

CMP

1074

Sector

NBFC

AUTO

Corporate Action:

NA

Security in Ban period:

BHARATFIN, DLF, INFIBEAM, IRB, JINDALSTEL, JISLJALEQS,

JPASSOCIAT, JSWENERGY, ORIENTBANK, RCOM, RELCAPITAL,

TV18BRDCST, UJJIVAN

Today Event

NA

Trading Idea - Derivatives

STRATEGY UPDATE : MARUTI Bull Call spread

Instrument

B/S Lot

Reco

MARUTI 27 Apr 6200 CE

MARUTI 27 Apr 6350 CE

Buy

Sell

1

1

71

25

Highest Put OI

Instrument

Strike

9000

21500

OI

5147625

725120

Chg in OI

-77925

-16840

CMP

58.00

19.15

Nifty 27-Apr

Bank Nifty 27-Apr

Target: Rs 15000; SL: Rs.5000; Margin: approx Rs. 112000

MOSt Market Outlook

24th April 2017

Trading Calls

BHARAT FORGE

Buy

CMP :

Target :

INR 1074

INR 1150

Derivatives Idea

MARUTI

Bull Call spread

Buy 1 Lot 6200 CE

Sell 1 Lot 6350 CE

'Price action of Bharat Forge clearly shows a rising trend. We

noticed that price is taking support at 1041 and making a sharp

reversal

3

We see a confluence of a rising trend line. Buying interest on

every small decline indicates overall strength in stock which

has potential to outperform the broader market

3

We are expecting the stock to extend its up move towards

1150 levels

3

Maruti has taken support near to 6050 and adding fresh built up

of long position

3

Highest Put concentration at 6200 could act as vital support while

unwinding in 6300-6350 CE could see momentum towards 6300

(highest call concentration)

3

Indicating positive to range bound move thusbull clal spread is

recommended

3

FII & DII Activity (INR in Cr)

Cat.

FII

DII

Amt

-978

1132

MTD

-4702

4336

YTD

20660

34267

FII F&O

Institution

INDEX FUTURES

INDEX OPTIONS

STOCK FUTURES

Net B/S

-1,238

512

-91

OI

Short

Synthetic Short

Short

MOSt Market Outlook

24th April 2017

Long Built-up

Short Built-up

Long Unwinding

Short Covering

Nifty Option OI

1- Day change in Nifty OI

MOSt Market Outlook

24th April 2017

Morning Meet Notes

Research Notes

HDFC Bank - Stellar performance on all fronts (CMP 1497, TP 1790, Recom BUY)

3

HDFC Bank's (HDFCB) 4QFY17 PAT grew 18% YoY to INR39.9b, led by 27% YoY PPoP growth.

NII grew 22% YoY to INR90.5 bn. Loans grew 12% QoQ and 19% YoY to INR5.55t.

3

Margins (reported) increased 20bp sequentially to 4.3%

3

GNPA stable at 1.1% and NNPA at 0.3%

3

3

We value the bank at 4x FY19 BV

ACC - Volume growth led by capacity expansion (CMP 1497, TP 1521, Recom Neutral)

3

1QCY17 volumes increased 3.8% YoY to 6.60mt. Cement realization of INR4,265/t (+4% YoY, -2% QoQ)

EBITDA declined 9% YoY to INR3.42b, translating into margin of 11.0% (-231pp YoY, +250pp QoQ)

3

PAT declined 10% YoY at INR2.11b

3

With new growth avenues (expansion in east) and market share improvement, we expect better profitability in CY17/CY18

3

3

The stock trades at ~30% discount to peers at EV/ton of USD109 (CY18E)

Ashok Leyland - (CMP 85, TP 98, Recom BUY)

3

EGR based solution to BS4 could give AL competitive advantage

3

Near term demand weak, but macro indicators suggests recovery

Confident of converting BS3 inventory to BS4 due to EGR technology

3

LCVs - target to double market share to 30% by launching 1 product per quarter

3

Exports - targeting 33% of volumes from exports

3

3

AL trades at 16.5x/12.9 FY18E/FY19E EPS and EV/EBITDA of 9.8x/7.7x respectively

MOSt Market Outlook

24th April 2017

MOSt Market Outlook

24th April 2017

Currency Ideas

USDINR

GBPINR

3

3

The pair closed the last week near 64.64, up by about 0.25% for the period.

Sideways-to-lower move is expected to continue for the short-term as long

as the pair holds below stiff trend line resistance at 64.90-65 zones.

Selling on rallies is thus advised

3

GBPINR closed towards a 1.5-month high near 82.63 level last week after break-

ing out of strong resistance near 82.10 level.

The same is now likely to act as strong support and short-term bias looks

positive above it.

Buying on dips is thus advised with a gradual upside move towards 'Double

Bottom' target near 84.40 looking likely.

Immediate resistance is at last week's high near 83.10 levels

3

3

3

3

MOSt Market Outlook

24th April 2017

Dharmesh Kant (Head - Retail Research)

Dharmesh.Kant@motilaloswal.com

Chandan Taparia (Derivatives & Technical Analyst)

Chandan.Taparia@motilaloswal.com

Tina Gadodia (Derivatives Analyst)

Tina.Gadodia@motilaloswal.com

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